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P&A, Acquisitions Lift Accell Profits

Published July 23, 2010

HEERENVEEN, the Netherlands (BRAIN)—Accell Group said net profit increased 9 percent through the first half of 2010 while turnover was up 3 percent.

The Dutch company pegged the growth to sales of bicycle parts and accessories, fitness equipment and the acquisitions of Hellberg and German distributor Bäumker, completed in June 2009 and January of this year, respectively.

Net profit grew to €24.1 million for the first half of the year, up from €22.1 million through the first half of 2009. Turnover was up 3 percent to €342 million from €333 million for the same period in 2009.

“The long winter and the bad weather in May, the general economic developments and spending patterns during the FIFA World Cup had the greatest impact on the sales of traditional bicycles. These factors had less impact on the sales of high-end sports bicycles and electric bicycles,” the company said in its mid-year financial report.

The number of bicycles Accell Group sold—approximately 580,000—remained stable. However, sales of bicycle parts and accessories rose 11 percent to €64 million in the first six months of the year. “Many consumers who did not buy a new bicycle had their existing bicycles repaired,” the company said.

Bad weather hurt sales primarily in the Netherlands where bicycle sales dipped 7 percent through the first half. In that country, sales of traditional bikes were down, but sales of electric bikes increased 10 percent. E-bike sales were also up in Germany, a market where the category is still relatively new.

Accell saw strength in sales particularly in Scandinavia, Austria, Spain and the UK during the first half. The company’s Ghost, Hai Bike, Winora and Lapierre bikes sold particularly well.

In North America, sales rose mostly due to the success of BMX brand Redline, marketed and sold by SBS. But Accell is predicting an upswing in that market as indicators so far point to a recovering economy.

“The downturn in sales in North America seems to have come to an end. There is enormous interest in cycling and consumers are also buying new products,” the company said.

Like other suppliers in the global bike industry, Accell is having to contend with currency exchange rate fluctuations and said it will adjust product pricing, but increases will be limited to 10 percent.

Though the unpredictability of the global economy makes forecasting difficult, Accell Group is predicting conservative growth in the second half. It expects turnover to increase and net profit to grow 5 to 10 percent. The company also will seek new brand acquisitions.

Accell Group owns more than a dozen brands including Batavus, Bremshey, Ghost, Hai Bike, Hercules, Koga, Lapierre, Loekie, Redline, Sparta, Staiger, Tunturi, Winora and XLC. It has production facilities in the Netherlands, Germany, France, Hungary and Belgium.

—Lynette Carpiet

Topics associated with this article: Earnings/Financial Reports

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